Answer all otherwise dont take.

Question 1:

A coupon bond that pays interest annually has a par value of $1,000 that matures in 3 years and has a yield to maturity of 10%. If the coupon rate is 8%, the intrinsic value of the bond today will be _______.

		$885.65
		$950.26
		$970.16
		$1,000.00
		None of the above.

Question 2:

QUESTION 2

Advantages of mutual funds to investors include which one of the following? [I] Record keeping and administration [II] Diversification [III] Guaranteed rates of return [IV] Professional management

		I only
		II and III only
		III and IV only
		I, II and IV only
		II, III, and IV only

Question 3:

All else equal, bond prices are more sensitive to interest rate if the bond has _________. [I] Lower coupon rates [II] Longer maturity [III] Higher YTM

		I only
		I and II only
		II and III only
		I, II and III only
		III only

Question 4:

An open-end fund has a NAV of $18.00 per share. The fund charges a 3.5% load. How much money does an investor need to spend in order to obtain one share of the fund?

		$16.39
		$17.37
		$17.63
		$18.65
		None of the above

Question 5:

ssuming a two-factor APT world where the systematic risks are GDP risk and Oil risk, risk-free rate is 3%. Assume there exists GDP and Oil factor portfolios that are tradeable. If a trader estimates the expected return of Portfolio ABC to be 21.5%, the alpha of Portfolio ABC is _______?

Portfolio ABC	Factor Loading	Risk Premium
GDP	0.8	5%
Oil	1.5	10%

		-1.0%
		-0.5%
		0.0%
		0.5%
		1.5%